As I write I am listening to the early evening news on the BBC. They are running an item about the Abbey’s 5 x offer. It sounds incredible. Incredible for a number of reasons.
This is incredible at its simplest level as it seems like a massive leap in lending terms from the constraints we have all worked within for many years. Incredible that a lender is prepared to stretch incomes that far. And it’s an incredible offer that will no doubt have hundreds of first-time buyers beating a path to Abbey’s doors.
But it’s incredible too that the headlines fail to mention that this deal only applies to certain borrowers – those with incomes over £60,000 per year. It’s also incredible that the headlines fail to explain that any loans or credit commitments are likely to be deducted from income before multiples are applied. And incredible that the headlines fail to mention that a minimum 25% deposit will be needed. Incredible that they fail to remind people that a number of lenders are already offering this type of income stretch for appropriate clients.
But as I sit here feeling, well, incredulous about these and other aspects of this news item I also say well done to Abbey’s marketing team. Because surely the object of this exercise is simply to get customers through Abbey’s doors. If they don’t fit this scheme Abbey will certainly find them an alternative. And if they can’t take advantage of the massive income stretch Abbey will no doubt do its best to lend them a more appropriate amount. Incredible work, Abbey.
Next, estate agents. I am tired of hearing clients say that an agent has put pressure on them to meet its own financial adviser. Clients who have spoken to me before going house-hunting nearly always stand their ground in this circumstance, but I regularly hear about the intimidating tactics which agents apply to persuade the less well informed. This practice must stop.
Estate agents remain unregulated and pretty much unqualified. According to a survey by Easier2move, swathes of them are unaware of recent changes to the content of Home Information Packs. While I understand their frustration and confusion when the goalposts are moved, it is inexcusable to be so blasé about one’s business. The sooner estate agents become regulated, the better.
Following my recent request for feedback on lenders and BDMs, a number of you kindly sent me feedback. Some people have interesting ideas about how to tackle problems, including billing lenders for time wasted. I shall collate my findings over coming weeks and, of course, report back.
Finally, and on a lighter note, I was delighted to see at last that someone notable in this industry drives a sensible car (Mortgage Strategy, 30 October). I have been waiting for ages for someone featured in the ‘Me and My Car’ section to own something other than a highly expensive, flash, fast car, usually with a desirable marque and rarely with any environmental conscience. (Apologies to any of you who have been featured that don’t fall into this category.) I am not a green crusader and I love great cars,but wasn’t it refreshing to see that Sean McDonnell of Platform drives a Zafira?